No leaps for interest rates on loans in Bulgaria

It is unlikely that interests rate on loans in Bulgaria will increase significantly. That was annonced by the Bulgarian National Bank (BNB) in regards to its quarterly review of the economic and banking situation in the country.

This forecats is made by considering the interest rates hike expectancy in the euro-zone as well as recent activities and progress on Bulgarian market.

BNB’s experts claim that global credit crisis does not influence loans interest rates as much as it does in other countries. It is said that the main reason is that there is a strive for competition among all Bulgarian banks.

According to BNB, most lenders prefer increasing the interest rates on already existing loans. This is done in order to restrict early repayments of any loans virtually useless. Experts also say that this way interest rates will make early loan repayment useless.

Last month, several major banks agreed to increase the interest rates altogether with a range for the increase of about 0,25 – 0.5 %.

Although it is believed that there will be no additional increases, some people still fear that banks can leave them with their hands tied up by allowing another increase by the end of the year.